Eicher Motors Ltd (EML) shares zoomed 8% in the early morning trade on Thursday following the strong Q2 FY25 numbers released by the Royal Enfield maker. The share of Eicher opened a gap up at ₹4,697.55 on the BSE and soon hit the day's high at ₹4,697.55, up 8% since yesterday's closing price.
At the current share price of ₹4,906.85 on the BSE, the scrip is trading 3% lower than the one-year high of ₹5,104.50 touched on September 27, 2024. With this, the automaker's m-cap stands at ₹1.34 lakh crore.
Eicher has seen 'muted' gains in the past year, rising by just 27.82%. The shares of Eicher have registered a 1.55% rise in the past week, while its one-month gain stands at 2.98%. In the six months and year-to-date period, the stock has risen just 3.90% and 21%, respectively.
The parent company of Royal Enfield saw its net profit jump 8% to ₹1,100 crore in the July-September quarter, while the revenue stood at ₹4,263 crore compared to ₹4,115 crore in the year-ago period. EBITDA was ₹1,088 crore, almost flat from ₹1,087 crore in the year-ago period.
During Q2, Royal Enfield recorded sales of 2,25,317 motorcycles vs 2,29,496 units in the year-ago period. Eicher's JV VE Commercial Vehicles or VECV’s revenue stood at ₹5,538 crore in Q2 FY25, up 8% YoY, while sales surged to 20,774 in Q2 FY25 over 19,551 in the year-ago period.
Siddhartha Lal, managing director, Eicher Motors, says the company continued to sustain the momentum both at Royal Enfield and VECV. "At EICMA, earlier this month, we launched two motorcycles on our 650-Twin platform; the Bear 650, and the Classic 650."
Notably, Royal Enfield forayed into the EV space in Q2 FY25 by announcing the new electric vehicle brand, Flying Flea, at EICMA earlier this month.
Royal Enfield operates in India and over 65+ countries, with development facilities in Leicestershire, UK, and Chennai. In addition to motorcycles, EML has a joint venture with Sweden’s Volvo Group- VE Commercial Vehicles Limited (VECV) in the commercial vehicle space.
Here's the latest analyst commentary on the Eicher Motors stock.
Emkay: 'Buy'
Emkay Research has upgrade EIM to 'BUY' from 'Sell', hoisting target price to Rs 5,300. "While the mgmt did acknowledge a partial element of pentup demand (after the last few months of weakness), post-festive momentum has largely sustained (better than pre-festive). With the competitive cycle largely behind, along with growth revival, we raise FY26E/27E consol EPS by ~10% each, led by volume upgrades and building in 82K/97K average monthly RE volumes."
The analysts say near-term margin pressure would be addressed once operating leverage kicks-in.
ICICI Securities: 'Add'
The brokerage says Eicher Motors’ Q2 standalone EBITDAM came in at 26.3%, down 160bps QoQ vs consensus estimate of 28%, while margin decline was due to higher other expenses. "With volume growth likely to remain 7%, we believe additional driver for EBITDA growth would be rise in ASP as 450cc/650cc model mix is set to rise, other than exports revival on a low base. We have cut our FY25/26E EPS by ~2% to factor in lower margins led by higher marketing expenses. Maintain ADD with DCF-based revised TP of INR 4,850 (earlier INR 4,827), implying ~26x FY26E EPS."
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